EU big four push to tax internet giants

The eurozone’s four main countries are pushing to tax internet giants on their turnover rather than on their profits, in an effort to prevent them from taking advantage of low tax rates in some member states.

In a letter to the Estonian EU presidency and the European Commission, the finance ministers of France, Germany, Italy and Spain ask the EU executive to design an “equalisation tax” on turnover, so internet companies can pay tax where they make money rather than where they registered. At the moment, companies such as Google, Apple, Facebook and Amazon – the so-called Gafa – can pay minimal taxes in Europe thanks to subsidiaries in low tax rate countries like Ireland.

Their profits are reported where the subsidiary is, even if revenues are generated in other countries. Earlier this year, French judges said that Google was not required to pay over €1 billion in taxes on revenues made through its AdWords service, because it has no “permanent establishment” in France. “We should no longer accept that these companies do business in Europe while paying minimal amounts of tax to our treasuries,” the ministers say in their letter…